Icahn Offers Shareholders a Seven-Year Bet on Dell’s Future Success
In a statement issued earlier this morning, Icahn added warrants that would allow shareholders that take advantage of his tender offer the right to buy one share for every four they sell to him within seven years.
The strike price on the warrants is $20, which means that shareholders who participate would be making a bet that the remaining shares — about 28 percent of Dell shares would remain publicly traded in this scenario — would ultimately reach that price. Over the course of seven years, they might, if a turnaround takes place. But it also extends the waiting period to get paid on a Dell investment, versus getting paid right away — relatively speaking — under the buyout plan.
If it looks like a last-ditch attempt, it probably is. It amounts to Icahn’s fourth attempt to sway shareholders to vote against the buyout, and each one has become incrementally more complex to understand, compared to the straightforward proposal that CEO Michael Dell and private equity firm Silver Lake have offered to take the company private.